Government and DTI say lenders rip off customers
Britain's mortgage lenders rip off their customers and they
should pay them compensation.
That's what the Government and the Department of Trade and Industry think. They plan to review the way British lenders sell mortgages in a move that some experts think will rival the pension mis-selling scandal.
The DTI has identified several common rip-offs: including mis-selling, poor advice, poor responses to customer complaints, excessive fees and unfair contract terms.
Advance warning of this is almost certainly why the Council of Mortgage lenders U-turned last week and announced that it would work with the Government to write new laws governing how lenders sell mortgages.
The CML's sudden switch from promoting self-regulation surprised us and many other people who have campaigned for better rights for mortgage borrowers. But news that the Government had accepted evidence of widespread customer abuse through obscurely worded contracts led the Government to call for simpler mortgage deals. Close examination of the CML's earlier announcement that it would work with regulators revealed that it wants to work with them to create a simpler system.
The U-turn, the emphasis on appearing to agree with the Government's plans and the timing all suggest that mortgage lenders knew the game was up.
Except, of course, that it isn't.
By working with the Government and regulators as they craft new mortgage laws, the CML ensures that mortgage lenders will play a bigger part in the way those laws will turn out.
You might ask: "wouldn't they have played a significant role anyway?" the answer is: "Yes," but given that many people in the mortgage industry think lenders have ripped off around one quarter of their customers, continued resistance could have exposed lenders to even more bad publicity and made regulators less willing to listen to their claims. (Remember, this is an industry that is on record as claiming it is virtually responsible for the entirety of the wealth Britain has generated since the Second World War).
The Financial Services Authority will regulate mortgage lending - a fact we should all be concerned about. The Financial Services Authority has officially and unofficially resisted taking mortgage lending under its wing for fear of overloading its staff. An alternative approach might have been to take on more staff. There's enough evidence that the scale of the problem deserved would have warranted it.
Mortgage lenders to be questioned over their selling tactics
Trade and Industry Secretary Stephen Byers is to question
mortgage lenders at a "summit" designed to introduce them
to the basic concepts of "customer service" and difficult words
like "fair" and "honest".
Quite what form that summit will take, we have yet to find out
but the BBC is carrying a report about it at:
http://news.bbc.co.uk/hi/english/business/your_money/newsid_460000/460994.stm
Government knew of lender practices by 1993
Although Byers said the previous Conservative government had
ignored pensions mis-selling and that Labour would not ignore
mortgage mis-selling. But there really is evidence that the previous
Government had ignored mortgage mis-selling too. The web-site
for the National Association of Citizens Advice Bureaux lists case
after case of mortgage mis-selling and customer abuse in a report
it submitted to the Government in 1993. Anyone who is familiar
with the Home Repossession Page will feel a shudder of
recognition as they read through the NACAB report because the
same things are still happening six years later.
To read the report you'll need to complete NACAB's free
registration form but it's worth effort. Find the report at:
http://www.nacab.org.uk/polfull.ihtml?id=0000005&table=rept
Scottish customers to get better deal
The Web version of the Daily Record is carrying a report that
Scottish mortgage customers are to get stronger rights against
repossession if they fall into arrears. The report is at:
http://www.yahoo.co.uk/headlines/19990914/drecord/p2s6_937349617.html
Changes to the Home Repossession Page
We've been repairing those parts of the site that were damaged
while we moved it on to a different Web server. If you've had any
problems getting to any parts of it, they should be working now.
The section on serving Subject Access Rights notices on lenders
has been extended to clarify the differences between different
rights to data given to you by the Data Protection Act 1984. This
is in the Do's and Don'ts section and is a must-read if you are
facing a shortfall claim.
http://www.home-repo.org/dos/dpasar.htm
[ends]
| Home Page | Receive free news and updates |
| Tell a friend about this site | |
| © The Home Repossession Page 1997-1999 | |